Moving beyond price: why the Procurement Act means housing must rethink social value

Social value and the Procurement Act: part one of three.

For registered providers, the Procurement Act 2023 governs how contracts are now awarded. Government guidance confirms that not-for-profit housing associations continue to be subject to the Act, with the position unchanged from previous legislation because the Regulator of Social Housing exercises sufficient oversight of housing associations to bring them within scope. That means the Act's duties on award, transparency and contract management apply directly to RP procurement teams, and social value sits within those duties rather than functioning as a separate consideration.

The shift to MAT

The change that reframes the evaluation is the move from the Most Economically Advantageous Tender to the Most Advantageous Tender. Under Section 19, a contracting authority may award a contract to the supplier that submits the most advantageous tender, defined as the tender that satisfies the authority's requirements and best satisfies the award criteria when assessed against the stated methodology and the relative importance of the criteria. The full text sits on legislation.gov.uk.

Dropping the word "economic" matters. The omission broadens the permissible considerations to include wider public benefit and ESG objectives, while retaining the legal requirement that award criteria must still be linked to the subject matter of the contract. For an RP, that constraint is practical: social value criteria on a repairs or retrofit contract have to connect to what is being procured, not to unrelated organisational goals. Social value functions as a scoring metric in its own right, weighted alongside price and quality rather than held in reserve to separate otherwise equal bids.

What actually binds an RP, and what does not

This is where most general commentary is imprecise, and the distinction is worth getting right. The headline "mandatory 10% social value weighting" comes from PPN 002. That PPN applies to central government departments, their executive agencies and non-departmental public bodies, the "in-scope organisations", and it notes that other public sector contracting authorities may wish to apply the approach. Housing associations sit in that second group. The PPN 002 Social Value Model, including its 10% floor, is something RPs are encouraged to adopt rather than legally required to apply. The model is published in full on the Civil Service procurement pathway.

What does bind an RP is the body of duties in the Act itself. Section 12 requires contracting authorities to have regard to the importance of maximising public benefit, a higher standard than the Social Value Act 2012, which only required authorities to consider social value. And the transparency duties apply across the contract lifecycle. Under Section 52, contracts valued over £5 million must generally include at least three KPIs, and authorities are required to monitor supplier performance throughout the contract term. Many RPs will also choose to adopt the PPN 002 weighting voluntarily, often because their commissioning partners expect it. The point for a procurement lead is that the obligation to demonstrate and manage social value does not depend on whether the 10% is mandated; it follows from the duties that already apply.

At a glance: what binds and what is encouraged

The risk sits after award, not at tender

Social value commitments have always been easiest to capture at bid stage and hardest to verify once a contract is live. The Act closes that gap deliberately. The move to MAT, combined with greater transparency and KPI publication, creates pressure to demonstrate outcomes rather than headline numbers, and partial delivery becomes a matter of public record rather than something managed privately.

That is the real exposure for finance and risk teams. A social value commitment scored at award, then published as a KPI, becomes a benchmark the organisation is accountable against. If delivery cannot be measured on a consistent basis, the published figures have no defensible foundation, and any divergence between what was promised and what was delivered is visible rather than contained. The cost of the social value built into supplier bids is being paid regardless; the question is whether the organisation can evidence what it received in return.

The mitigation is a single measurement approach applied from award through delivery, producing an auditable trail rather than a tender-stage estimate. Our platform uses SROI methodology accredited by Social Value International, which gives reported outcomes the standing to hold up under the scrutiny the Act now invites.

The takeaway

For registered providers, social value has moved out of the CSR column and into procurement compliance and risk management. The Act's duties on public benefit, transparency and KPI publication apply directly, whether or not an RP adopts the PPN 002 weighting. The practical task is to measure what suppliers actually deliver, on a consistent and accredited basis, so that the commitments scored at award can be evidenced when they become a matter of public record.

Part two looks at how to choose a social value platform that fits your delivery model.